Abercrombie & Fitch Co. will continue to expand overseas, especially in China, even as its U.S. store network shrinks.

The New Albany-based retailer expects to open 16 stores in foreign markets this year, with domestic development limited to outlet stores. Meanwhile, it expects to close 60 to 70 U.S. stores as their leases expire. It has closed 220 U.S. stores since 2010, culling underperformers from its portfolio.

Of Abercrombie’s international openings, seven are planned for China, including a flagship Abercrombie & Fitch in Shanghai. The company has seven stores in that nation.

He said Hollister’s two stores in Japan are performing well, generating sales that are double the company's expectation, and the company is considering accelerating growth of the brand in the country. The higher-priced Abercrombie & Fitch brand was struggling a few years ago in Japan.

Hollister expanded into the Middle East last year with a store in Dubai. Jeffries said it is on track to become one of the top Hollisters and more Middle East openings are expected this year. The company is opening in that region as a joint venture with Majid Al Futtaim Fashion, a first for the business.

Europe, however, remains challenging. Same-store sales are down in all countries except the Scandinavian ones. That said, business is satisfying the CEO.

“Even with the decrease in sales, stores are operating at sales levels that are above the mall averages,” Jeffries said. “They are very profitable stores.”

The international openings are down from previous years because the company is putting more capital into e-commerce and back-office operations. It isn’t ignoring new stores in the U.S., but any additions likely would be outlet stores.

“We have two test stores that have made-for-outlet merchandise today, a new store format, one is in Seattle, one is in the U.K.,” Jeffries said. “We are looking at this as a real potential in terms of the business, but we have to be very sure about the results before we can see.”

The $4.5 billion Abercrombie & Fitch (NYSE:ANF), which operates under the brands Abercrombie & Fitch, Abercrombie and Hollister, has 843 stores in the U.S. and 163 in Canada, Europe, Asia and Australia.